The main gap in our knowledge of evolution is understanding the detailed biochemical process by which organisms already well adapted to their environments acquire new functions. It is the purpose of this project to fill that gap by providing a solid experimental basis for a general theory of evolution of new functions. My model system has been the artificial evolution of lactose utilization by the bacterium Escherichia coli. I have already shown that I can evolve this new function in the laboratory via spontaneous mutations in the ebgA and ebgR genes. I have purified and characterized the unevolved enzyme, and many envolved enzymes biochemically. I have demonstrated evolutionary pathways and evolution by intra-genic recombination in the laboratory. This study has generated some testable hypotheses about the role of specific biochemical and genetic changes in the evolution of new functions. To complete this study I shall complete the analysis of the evolved genes by DNA sequencing, and carry out competition studies to test the hypotheses already developed. Specifically I shall: (1) Clone and sequence the unevolved gene ebg A (o), (2) Determine the sequence differences between the unevolved gene and the sixteen well characterized evolved genes, (3) Test various hypotheses by competition studies carried out in resource limited and resource unlimited environments. This project is expected to contribute significantly to understanding the processes of evolution; and to developing the techniques and concepts for artificially evolving new functions of ecological and industrial importance.